Incubators and Accelerators

Incubators and Accelerators in the UK

Incubators and accelerators can both be great ways to progress your business and move it on to the next level of maturity. Maybe you’re looking for the right mentorship and resources to get your venture fit and in shape ahead of raising a round of funding. Or maybe you’re still struggling to pin down exactly what your customer proposition is. Having an organised network of experienced entrepreneurs, peers and advisors can quickly prove to be just the environment you need to succeed!

Since ‘Incubator’ and ‘Accelerator’ are both buzzwords that get thrown around a lot on the startup scene, it can be confusing at times to know exactly the difference between the two, and where you should be taking your startup…

Q: What is an Incubator Vs. What is an Accelerator?

Business Incubators

are organisations dedicated to startups and early-stage companies. Traditionally, incubators might have been ring-fenced parts of an existing business, tasked with ‘incubating’ and developing a business idea that was conceived ‘in-house’. Most often the parent company might dedicate some time and resource to developing a number of ideas, to then see what they turn into, and later spin them out into new side businesses. Most incubators operate on the premise of incubating an internal idea by bringing in external specialists, but this isn’t always the case; and you can find incubators who will accept applications from startup founders outside their business or existing network.

An incubator

will work with a startup to increase its chances of success. The startup may stay at an incubator for a long time but may also be paying a small rental fee during this course. Incubated startups may remain in an incubator for an extended period of time, maybe even years. An incubator will typically have a larger equity stake in the startup company (larger than an accelerator might). Incubators do not typically provide direct funding to a startup.

In contrast, a business accelerator

is an independent organisation which offers expert advice, mentorship, and a small amount of capital to help develop your startup. This is all offered in exchange for a small equity stake (typically in the region 5-15%). Accelerators typically run finite programmes of maybe 3-6months, after which the cohort of startups will ‘graduate’ and are expected to move on in their journey elsewhere. Time spent in an accelerator is typically high intensity and focussed on getting to a position where you are much more likely to go on to successfully raise funding at the end of the programme. Two of the biggest and best known accelerators are Y-Combinator and Techstars, both in the US.

Both incubators and accelerators can offer access to workspace, high speed internet, technical support, mentorship, legal advice, design and development resource, networking effects and introductions to future clients and/or investors.

To read more on the differences between incubators and accelerators, here are 3 useful articles I’ve come across:

http://www.level39.co/@Level39CW
Level39 is Europe’s largest accelerator space for technology businesses innovating in the finance, retail and future cities sectors. It’s based on the 39th floor of Canada One in Canary Wharf, London (nice views!!).

Entrepreneur First (EF):

http://www.joinef.com/@efLDN
(Their blurb): ‘We invest in Europe’s top technical talent and support them to build world-class startups in London’.

https://online.wayra.org/@WayraUK
Wayra is Telefonica’s startup accelerator. Don’t know who Telefonica are? They’re a global telecoms company who own the O2 mobile network and brand in the UK.
The Wayra accelerators have offices in cities across Europe and the London site is very nice indeed! Wayra typically offers businesses on its accelerator programme funding of up to $50,000, plus mentorship and office space etc. in exchange for an equity stake. The programme is very well known, respected and sought after.

Related programmes and courses in entrepreneurship:

The New Entrepreneurs Foundation (NEF) aims to provide the UK’s leading entrepreneurial training programme to fast-track young, talented, aspiring entrepreneurs to start their own businesses.

We do this by selecting the UK’s brightest and most entrepreneurial young people and by providing them with a unique, 12-month programme which consists of five main components: a paid work placement in an entrepreneurial company; an intensive fast-track learning programme; monthly speaker & networking events; an executive coach and a business mentor. Through this programme, our New Entrepreneurs are equipped with the hands-on experience, skills and networks to build scalable businesses.

Some more info:

So the NEF is a London based charity with a mission to nurture and promote entrepreneurship and start-up businesses in the UK. Each year the NEF takes on a class or ‘cohort’ of around 30 young aspiring entrepreneurs and business minds, with the aim of providing us the best programme of learning, hands-on work experience, and networking events etc. to equip us with the tools to successfully launch or grow our own business ventures now and in the future.

The New Entrepreneurs Foundation is sponsored and supported by a large group of highly successful and prestigious businesses including Virgin, TalkTalk, McKinsey & Company, Deloitte, Tesco, and Diageo to name but a few. The board of Founders and Trustees behind the NEF is impressive to say the least and is headed up by Oliver Pawle, previous Vice-Chairman of the Investment Banking Division at UBS. More information on the structure and leadership of the NEF can be found here: http://www.newentrepreneursfoundation.co.uk/our-leadership

The NEF programme is in its fourth year of running now, I was a member of the 2014 class, and it really is fantastic if you want to develop your interests, knowledge and skills in business with a view to owning and running your own business(es) in the future!

My original blog records all of the learning courses, events and pitching days I attended during my year with the NEF.